I don’t have sources here but enough people have cribbed that nowadays too many MBAs are going into finance, and banking, and not too many of them get into “real management” jobs, which is what the country/the world desires them to get into. I clearly remmeber a Mint column on this topic by Govind Sankaranarayanan. And that is surely not the exception. And I remember reading this article very recently (don’t know where) which says that the reason MBAs were taken into banking was to provide a business perspective to banking, and not to be hardcore finance people themselves.
Management roles can be broadly classified into two – functional management and coordination management (the latter is also known as “general” management). Functional management is more like “captaincy” – you essentially do similar work to what your team does, and you guide and direct them, and help them, and boss over them, and get paid a lot more for it. The best part of functional management is that you can outsource all the chutiya kaam to some underling. And there is enough “functional” interaction for you with your team in order to keep your mind fresh.
Coordination management, on the other hand is mostly about getting things done. You don’t necessarily need to have experrtise in what your team does, though some degree of comfort does help. Most of your work is in coordinating various things, talking to people, both inside the team and outside, both inside the company and outside, and making sure that things are done. No special studness is generally required for it – all it requires is to be able to follow standard operating procedures, and also to be able to get work done out of people.
Historically, functional managers have been “grown” from within the team. it is typically someone who was doing similar work at a lower level who gets promoted and hence takes on a leadership role. So in an engineering job, the functional manager is also an engineer. The sales manager is also typically a salesman. And so on.
Historically, MBAs have been generally staffed in “coordination management” roles. Typically these are multifunctional multiskilled areas for which it is not easy to pick someone from one of the existing departments, and hence MBAs are recruited. Historically, when people have talked about “management”, they have referred to this kind of a role.
So through my description above, and through your own observations in several places, you would have figured out that coordination management/general management is typically a fairly fighter process. It is about getting things done, about following processes, about delivering, etc.
This applies only to India – but there is a reasonably high “stud cutoff” that is required in order to get into the better B-schools in the country. This is because the dominant MBA entrance exam – CAT – is an uberstud exam (I would argue that it is even more stud than the JEE – which requires some preparation at least, and hence puts a reasonable fighter cutoff). So you have all these studs getting into IIMs, and then discovering that the typical general management job is too fighter and too less stud for them, and then looking for an escape route.
Finance provides that escape route. Finance provides that escape valve to all those MBAs who figure out that they may not do well in case they get into general management. Finance as it was in the last 5-10 years was reasonably stud. And thus attracted MBAs in reasonably large numbers.
The simple fact is that a large number of people who get into MBA won’t be able to fit into a general management kind of job. Hence there is no use of commentators cribbing about this fact.
If the IIMs decide that they would rather produce general managers rather than functional managers, they would do well to change admission requirements. To make admission less stud and more fighter. ISB, in that sense, seems to be doing a decent job – by having significantly lower stud cutoffs and putting more emphasis on work experience and other fighterly aspects. Hence, you are more likely to find an ISB alum going into general managementt as opposed to IIM alum.